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During the two-day EU summit on June 28 and 29, all eyes will be
breathlessly riveted on German Chancellor Angela Merkel—with one
question on all lips: will she blink? Because nothing less than
the future of the Eurozone and the euro is at stake. And by
extension, the world economy. Only she can save it. And she'd
have only 48 hours!

There is even the Grand Plan, issued by European Council
President Herman Van Rompuy. It includes all the
goodies: an unelected European Treasury with power over national
budgets and how much countries could borrow; Eurobonds; a banking
union that would guarantee deposits; and the ESM that would bail
out the banks. The Grand Plan would require common policies on
taxation and employment regulation. An aura of “democratic
legitimacy” would be created by joint-decision making with
national parliaments. And every item to be funded would be paid
for by taxpayers in other countries, particularly by those in
Germany.

Mario Monti, Prime Minister of teetering Italy, had set the stage
last Thursday when he’d warned that the Eurozone would break
apart if summit attendees didn’t sign off on a Grand Plan. And
he’d brought his own list of items that were “absolutely
necessary” to save the Eurozone [read.... The Extortion Racket Shifts to Italy].

The summit will also have to save Greece. The new
conservative-led coalition government had already announced it
would throw out the structural reforms on which the second
bailout package had been conditioned. Instead, it came up with a
plan that consisted mostly of backtracking on reforms already
implemented. And it would use the summit to sell that plan. But
it was broadsided by chaos ... in Greece.

On Saturday, three days after being sworn in, Prime Minister
Antonis Samaras underwent eye surgery which would prevent him to
travel—so he won’t attend the summit. He appointed his new
Foreign Minister Dimitris Avramopoulos to fill his slot. Brussels
accepted this substitution apparently then checked its thick rulebook and did
an about-face; the only possible replacement would be President
Karolos Papoulias. So, a largely powerless figure will lead the
Hail Mary delegation to Brussels.

Shortly after settling down in his new digs, and even before he
was sworn in as Finance Minister, Vassilis Rapanos must have
caught an inadvertent glimpse of the true numbers; nauseated and with painful knots in his gut,
he ended up in the hospital on Friday—and later resigned. So he
won’t attend the summit. On Tuesday, a replacement finance
minister was named: Yiannis Stournaras, economics professor at
the University of Athens. But he hasn’t been sworn in yet and
won’t be making the trip to Brussels either. Instead, his
predecessor, George Zannias, Finance Minister in the powerless
and ineffectual caretaker government, will fill the slot.

The Hail Mary delegation, devoid of political leaders, will
present Greece’s plan but can’t negotiate. Remarks threatening
the Eurozone with its demise unless Greece got what it wanted—a
Eurozone negotiating tradition—would be brushed off as
inconsequential. So Greece won’t be saved during the summit.

Meanwhile the Grand Plan is floating around, fishing for
reactions. And predictably, it irritated Chancellor Merkel. The
balance between stronger common action and common liability has
not been preserved, she quibbled. Instead, the paper would allow
a rapid mutualization of debt, which she wouldn’t tolerate within
the Eurozone, she said, “as long as I live.”

That only-over-my-dead-body stance was the clearest expression
yet of what she’d been saying for months, regardless of how the
non-German media had imagined her veering off track. Even Foreign
Minister Guido Westerwelle made it clear that Germany would “not
accept” Eurobonds. Europe would break apart not because of too
little solidarity but too much solidarity, he said.

“We fight for the cohesion of the Eurozone but against
mutualization of debt,” said Minister of State Michael Georg
Link. The Grand Plan “reads for whole stretches like a wish list”
he said, but to “begin with the mutualization of debt is the
wrong path.”

Yet Germany is conflicted. While there are protests on the
streets and the internet against the ESM and the fiscal union
pact, and while Chancellor Merkel has put her body between
Germany and the mutualization of Eurozone debt, industry appears
to occupy the other side of the debate.

The latest was Hans-Peter Keitel, President of the BDI, an
umbrella lobbying organization representing 100,000 businesses.
In a letter, he pushed the government to maintain
the euro for “political and tangible economic reasons.” Germany’s
export-oriented industry benefitted from the euro as it
eliminated exchange-rate risks in the Eurozone trade, 40% of
Germany’s total exports, he wrote; and inflation has been lower
under the euro than under the D-Mark in the 80s and 90s. “We
Europeans must expand the monetary union to a political union,”
he said and then called for the very mutualization of economic
and financial policies that would smack into Merkel’s
only-over-my-dead-body stance. And not being a big fan of
democratic controls when it came to businesses and bailouts, he
denigrated “populist speculation and guesses over the financial
burdens and the supposedly undemocratic fiscal policy
mechanisms.” He certainly wouldn’t want the people and taxpayers
getting in the way of the Grand Plan.

Alas, a much more modest item, the ESM bailout fund, which hasn’t
even been ratified yet, is already in hot water with the Federal Constitutional
Court. Any step beyond it, such as mutualization of debt and
other aspects of the Grand Plan, will most likely be
unconstitutional and would require that the Germans junk their
sacred and beloved document for a new constitution just to bail
out debt sinner countries. Stop dreaming, the Chancellor said
today.

And yet, she just can’t catch a break. She has already committed
hundreds of billions of taxpayer euros to bail out collapsing
countries. In return, she wants them to live within their means
and restructure their economies so that the bailouts wouldn’t
have to continue ad inifinitum. For that, she is added
to the Axis of Evil; and then the Swiss Minister of Defense
speaks up. Read.... “You Can Lose Freedom Only Once.”